How COVID-19 Has Made Succession Planning More Important Than Ever

Having an emergency succession plan in place is important for any business. In the current climate, with COVID-19 still rampant and death tolls in many areas on the rise, it is more important than ever before.

Even outside of the extremes of death, it is possible in any company that several of the senior leaders could be ill or isolating at the same time, leaving the ship without a captain unless a plan has been put in place. Succession planning is one of the specialities of Dr Edgar Paltzer at his Swiss legal practice.

At this time of global crisis, succession plans need to have back-ups to ensure companies can continue to operate efficiently even if multiple members of the senior management team become unavailable for long periods of time. Being prepared to meet crisis head-on is the best way to weather any storm.

The embedded infographic outlines five ways in which succession planning can help protect a business during the pandemic.

COVID-19: Five Ways Succession Planning Can Help Protect a Business During a Pandemic

Enterprise Risk Management

One of the most important components of enterprise risk management in planning for the unexpected loss or absence of a key member of the management team. When a key team member is suddenly unavailable and there is no contingency plan in place, this can have a negative impact on operations, short-term stability, employee morale, and even share prices.

Effective risk management practices include identifying individuals within a company who have the required skills to be able to jump into someone else’s shoes at short notice and fill the gap efficiently. These individuals need to be competent in the role and also have the necessary experience to reassure investors and other stakeholders that they will be able to hold down the fort.

Defining Criteria

The first step in selecting potential interim successors is defining the criteria required to fulfil the role. The strongest individuals will be those that boost or at least maintain employee and shareholder confidence. Continuity will be important, so the chosen successors need to be on board with the current operational strategies and prepared to follow guidance from their predecessors, at least in the early days, to help retain that confidence.

Outside of this requirement, different criteria may be prioritised depending on the nature of the crisis – for example, in an economic crisis, the CFO may be best placed to take over. With the business landscape changing in the wake of the current pandemic, emergency successors need to be strong leaders able to guide in times of uncertainty.

The key priorities of the business may have shifted drastically in recent months, so this needs to be accounted for when determining emergency succession criteria – these may not be the same criteria used for longer-term succession plans already in place.

The short video attachment looks at how succession planning is rapidly becoming a key part of all businesses, large or small.

Delineating Responsibilities

Emergency succession plans may involve a reshuffling of responsibilities, so each role may look different to how it did before the crisis. To help with this, responsibilities for each new role should be delineated clearly and concisely for all involved parties, so everyone understands who is responsible for what. This is not a time for office politics – the team needs to be able to pull together and support one another until business returns to some semblance of normalcy.

The PDF attachment looks at several ways in which companies can support emergency interim successors during times of crisis.

Business: Supporting Interim Successors in Times of Crisis